Tips on Giving Wisely

Changing the way you give

There are thousands of good causes that all ask for donations all year round. People want to make a difference but often feel overwhelmed by the sheer number of these requests for help.

Starting to think about giving more wisely and structuring your giving in a more strategic way is the first step in responding to the enormous issues that are present in our society those of inequality, poverty, violence and illness.

Starting your own personal giving plan:

The world renowned giving expert Tracey Gary was kind enough to allow us to use her philosophy and practical tools when outlining wise giving*. One of the first things that you can start to think about is developing your own giving plan this is a process of putting into place an action plan outlining the way you want to give over the next 12 months. It becomes a very valuable way to work through in your own mind what is important to you, giving you a sense of control over the way you are giving.

The beauty of a giving plan is that it gives you the freedom to choose to give in different ways; you can align yourself with people who share your values and vision, for supporting grass root fledging groups or groups who are breaking new ground.

Or you may decide that you only want to focus on proactive causes – ones that address structural poverty and inequality rather than solely focusing on acute crisis needs.

These are the types of issues that you can start to think about for your plan. For you this plan can be short or long, detailed or very simple. The important thing is to go though a process of thinking about your giving so that you become a better informed and proactive giver. These are some important questions to think about:

1. Why do you want to give?
2. Who to give to?
3. Where to give?
4. Which organisations to give to?
5. How to evaluate an organisation?
6. How much to give?
7. How to give?
8. When should I give?
9. Follow Up
10. Annual review

Why do you want to give?

A good starting point is to ask yourself why you want to give to your community. For many people these reasons are varied but by answering this question frankly it will make a real difference to who you are giving to….

Tracey Gary, a donor activist and philanthropist for more than 25 years suggests that one good idea is to establish your own mission statement answering the following question:

This question helps to define in your own mind what you want to achieve.

When working on your mission statement, these are some of the different factors to consider:

• Do you want to help individuals meet their material needs?
• Do you want to give back to society?
• Do you want to support research for improving society?
• Do you want to improve medical treatment and research?
• Do you want to prevent problems in individuals and society?
• Do you believe you or your family have enough?
• Do you believe that those with more should help those with less?
• Do you want to reduce your personal taxation?

Knowing why you are giving is the important first step and will help in your giving efforts.

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Who to give to?

Having worked through some of the reasons why you give, it becomes easier to work out who to give to.

Reflect back to what you did with your giving in the last year. What are the organisations you currently give to? How did you first get involved? What gives you the greatest satisfaction?

Your giving will have more meaning for you and your commitment to giving will be easier to sustain if you give to the causes that matter most to you causes that match your interests and values.

• Perhaps a medical research group working on a cure for a disease that affects someone in your family.
• Or it might be the arts organisation you enjoy as an audience member or at a local level as a participant.
• Or you may wish to concentrate your giving on groups that help children.
• Or you might want to support community groups that fight for rights and prevent social disadvantage in the first place.

• If I could change three things about my community, what would they be?
• What issues do I really care about?
• Should I support causes that directly benefit me?
• Am I willing to support causes that do not benefit me?
• Which type of work do I prefer to support eg. research, direct service, public education, self-help, advocacy?

Getting these clear in your mind then leads you to start giving with more confidence and purpose.

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Where to give?

One important issue for you to consider is your own preference for giving in terms of location of the cause.

• Do you want to give to an organisation in your local community or region?
• Or are you more interested in supporting a state, national or international cause?

You may feel that your giving will have the most visible impact if you give close to home. You are more likely to see first-hand the benefits of your gift, as well as the need for it and are better able to investigate an organisation or engage in its activities to gain an insider’s perspective on it.

In making a decision to give to a national or international cause you need to ask if you are overlooking a local group that addresses the same needs?

Also, your definition of community whether it be geographic, social or economic will affect your decision.

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Which organisations to give to?

Once you have decided on the causes or issues you would like to give to and whether they be local, national or international, then you need to choose the actual organisations you will support.

A good starting point is to analyse your current giving.

• Make a list of the organisations you currently give to and identify why you got involved in giving to them.
  
• Were they deliberate choices or did you accidentally start giving to them and continue through habit?
  
• Do they still give you pleasure or do you need to change your giving to reflect your current interests?

If after going through this process you decide that you need to rearrange who you are donating your money to, then the following may help you to select specific organisations which reflect your interests and values:

• Make a list of all the community organisations that make a difference to your life and to the life of your family: from support for childhood, including your schools, to support for your older friends and relatives, giving them a place to go or to belong.
• Do you feel indebted to any particular organisation?
• Do you like to know exactly what your money is supporting?
• Do you like to fund buildings?
• Do you like to fund specific projects?
• Do you prefer to give to organisations mainly run by volunteers?
• Do you prefer to give to small or to large organisation?
• Do you prefer to support an organisation that is just getting started or one that is already well established?

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How to evaluate an organisation?

Community organisations operate in different ways and use their funds differently. So before you give, it’s a good idea to be aware on how the organisation operates.

Some questions that you may like to ask yourself:

• Do I agree with its programs and goals?
• Does it achieve worthwhile results?
• Do I like the way it is run?
• Do I like how it reports its activities and accomplishments?
• Is it already healthy financially and so may not need more immediate money?
• How does this organisation compare to others of similar size, age and mission?
• What criteria will I use to decide if the money I contribute is well spent?
• How will I know if my criteria are met?
• How will my contribution be used?
• Will my donation be spent on the issue or problem directly?
• Will my donation be tax deductible? Most people never claim a tax deduction, so is it that important most smaller community groups do not have tax deductibility?
• How much of the budget is used for fundraising and administrative overheads?
• Does it have significant funds in reserve?
• Is it willing to share information with me?
• Will it respect my rights as a donor?
• Does it establish personal relationships with donors?

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How much to give?

You need to plan your giving just as you would your other financial obligations. Often a way of thinking about how much to give is as a percentage of your total income. On average Australians give away a very low percentage of their income.

Some of the issues to consider when working through the size of your giving:

• How much can I spend on giving while still being able to meet my family needs and without financially risking my savings?
• How much do I feel comfortable spending on my giving each year?
• Do you want to give a large contribution to one or a few organisations allowing you to become more closely identified and involved with those organisations?
• Would you prefer to give smaller sums to several, thus being more anonymous and diversifying your giving to match a broad range of interests?
• How does my current level of giving measure up to the average estimated affordable contribution for my income group?
• Where possible, give before retirement when the tax rate is higher.
• If you receive a premium in exchange for your gift (such as a book or a dinner) the amount of your tax deduction is reduced by the fair market value of the premium.
• Remember to maintain records of your donations - both for taxation purposes but also so that you can see the causes you have given to over time and get a better picture of the difference you have made thorugh your giving.

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How to give?

There are issues that you need to consider, no matter what level of giving you can make, but obviously if you give more then these questions become more significant:

• Do I want to give on a regular basis to one or more organisations perhaps via payroll or credit card donations?
• Or do I prefer to make one off donations at various times of the year?
• Do I prefer to respond to appeals as they arise?
• Do I like to give via the internet?
• Am I able to make pre-tax donations through my workplace?
• Should I consult a financial adviser about planned giving?
• Does my will include bequests for organisations that are important to me or from which I have benefited?
• Have I considered giving shares?
• Do I want recognition for this gift or would I prefer to remain anonymous?
• How much time can I dedicate to follow-up and evaluation of my contributions?
• Consider making cash donations instead of buying raffle tickets, merchandise or helping to sell confectionery as these are tax deductible.
• Check to see if your employer may be willing to match your gifts.

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When to give?

Planning your giving also involves deciding when to give. Giving sporadically as causes arise during a year may work for you. However, being more strategic and proactively planing your giving may ensure that you are giving to the causes that really matter to you and may give you greater satisfaction, particularly in the longer term. It also gives you a rationale for saying no to all the requests that come your way as you have worked through in your own mind how you are going to put back.

These questions may help you to decide what works best for you:

• When is the best time of year for me to give?
• Do I want to respond to pleas for donations during crisis?
• If so, do I want to set aside an amount for crisis responses?
• Do I want to set criteria for crisis responses?

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Follow up

Even after making your choice, it’s wise to follow the group’s progress after you make a donation. By insisting that organisations be accountable for the way they use your donations, you are doing more than reassuring yourself, you are reinforcing the integrity of charities and other non-profit organisations.

You can do this more easily in the local community by visiting the group, attending their activities and talking to people about the results of their work.

With more distant and larger groups you can read annual reports, check out websites and scan the media for reports about the organisations well being.

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Annual Review

Giving strategically means that you need to review and update your plan on a regular basis as your passions and financial situation may change. Maybe link this review in with the dreaded tax return each financial year.

Remember:
Give only when you feel comfortable that your dollars will be going to support an organisation you know and believe in.

* a copy of Tracy Gary’s book 'Inspired Philanthropy' can be purchased from Amazon.

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